As UK economy sees ‘strikingly strong’ growth, Burnham must temper his left-wing instincts
The UK economy is performing surprisingly well. Andy Burnham and co need to build on that momentum
Perhaps the best thing that could be said about the first Budget of the Andy Burnham era was that it wasn’t as bad as it could have been.
On the one hand, Chancellor John Healey missed opportunities to help business. On the other, he didn’t follow through on Burnham’s talk about ending “40 years of neoliberalism” and attempt to usher in a new socialist utopia, which would almost certainly have ended up going a bit Liz Truss.
It’s too early to tell what the effect on the economy will be. However, the latest growth figures show the UK’s gross domestic product increased by 0.7 per cent in the three months to September, well ahead of expectations. Economist Suren Thiru described the results as “strikingly strong”, with the UK now set to be the second-fastest growing economy in the G7 group of countries, after the US.
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The AI factor
The Office for National Statistics said the rise was fuelled “almost entirely” by the UK’s services sector, particularly computer programming, which grew at the fastest rate in three years, with evidence that businesses linked to AI adoption were boosting the sector.
All this is despite the energy price spike caused by the Iran War. If the US and Israel had not attacked and Iran had not blocked the Strait of Hormuz, things would have been even better. Healey underlined that point saying: “The Middle East conflict has hit growth worldwide, yet Britain is showing standout resilience.”
There are warning signs, however. The British Chambers of Commerce spoke of an “an emerging two-speed economy” with “investment by a few larger firms and sectors” driving growth, while many small-to-medium-sized firms were struggling. And, in volatile times, global events could always take a turn for the worse.
But it would be remiss not to acknowledge that growth of 0.7 per cent in just three months is a good result and one that should help give investors confidence in the UK economy. The task for Burnham, Healey and co is to nurture that nascent feelgood factor as best they can – and ignore the foolhardy entreaties of the hard-left.
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